Dubai's Luxury Market Soars: High Demand and Low Supply Drive Up Prices
Dubai's luxury property listings over $10 million have decreased by 65.5%, with only 460 available properties.
Demand from ultra-wealthy buyers has caused a significant shortage in Dubai’s high-end real estate market.
Listings in prime residential areas like Emirates Hills and Palm Jumeirah have fallen by 47% in the last year.
In the first half of 2024, Dubai recorded 190 home sales above $10 million, nearly equal to the full first half of 2023.
Sales of homes worth over $25 million rose by 25% in the second quarter of 2024.
The global private capital targeting Dubai’s residential market in 2024 is estimated at $4.4 billion, a 76% increase from 2023.
The Palm Jumeirah dominates with 89.3% of prime deals, involving 853 home sales in the first half of 2024.
Average prices in affluent neighbourhoods have reached AED 3,706 per square foot, up 7% from 2023.
There's a shift in buyer behaviour towards viewing Dubai properties as long-term investments rather than speculative buys.
The supply constraints and high demand are particularly pronounced in the $10 million-plus property category.
The Dubai luxury real estate market is witnessing a remarkable surge, driven by intense demand from the global super-rich and a striking drop in available properties. The current landscape reveals a significant imbalance between supply and demand, particularly in Dubai's most sought-after neighbourhoods like Emirates Hills, Palm Jumeirah, Jumeirah Bay Island, and Jumeirah Islands.
According to the latest report by Knight Frank, the listings of prime residential properties have plummeted by 47% over the past year. This reduction highlights the fierce competition among wealthy buyers for the most desirable addresses in Dubai, with the total number of available homes in prime markets dropping to just 2,851 from 5,376 in the previous year.
The intensity of the market boom is further evidenced by the sales figures of the first half of 2024. Dubai saw nearly 190 transactions over $10 million, almost mirroring the total from the first half of the previous year. The ultra-high-end segment, involving properties above $25 million, witnessed a 25% growth in transactions in the second quarter alone.
This booming demand aligns with findings from Knight Frank’s 2024 Destination Dubai report, which notes that $4.4 billion of global private capital is actively targeting the emirate's residential market this year—a significant increase from 2023.
The Palm Jumeirah remains the epicentre of Dubai's luxury real estate, accounting for 89.3% of all prime transactions. It's not just leading in numbers but also in value, with significant deals amounting to US$365 million in the second quarter for homes priced over $10 million.
Despite the constrained supply, Dubai's prime residential market has experienced strong price appreciation. Average transaction prices in the city’s affluent neighbourhoods reached AED 3,706 per square foot during the first half of 2024, marking a 7% increase year over year.
The sustained growth is attributed to a shift in buyer behaviour. Many high-net-worth individuals now view Dubai real estate as a viable long-term investment, shifting away from the speculative practices that marked previous market cycles.